Author Topic: Am I FIRE'able  (Read 9897 times)

keyvaluepair

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Am I FIRE'able
« on: October 04, 2017, 07:00:34 PM »
Hello all,

A n00b, given the luxuriant face ornaments the rest of you brandish.

My wife and I have been Mustachian at heart for many years. We've been socking away quite a bit of our incomes for some time now and (at least I) am considering FIRE. What I'd like to get advice on is an investment strategy for generating income during this time.

(1) We are debt free - our home in the PNW is valued somewhere in the high 900K - mortgage was paid of years ago.
(2) I'm 54 years old and my wife and I have a 7 year old. He already has a 529 plan that we started when he was born with a current value of 300K. We feel that it should be sufficient for when he goes to college.
(3) The remainder of our worth - I don't count the house of course in savings, investments, 401Ks and IRA is about $3.3M.  The retirement part of this is about $600K.
(4) We have a rather large position in Microsoft, about $800K worth - you can guess where I worked.
(5) Hope not to take Social Security till I am 67 (12 years from now).

Here are my questions:

(1) What would be a good hedging strategy given my current MS exposure?
(2) Ideally, I'd like to generate an income of $80K or so in retirement - does this seem feasible given my current portfolio. Yes, I am multiples over the 25x.
(3) In terms of revenue generating investments, are dividend funds a good way to go? I was thinking of a dividend fund like VYM combined with another international dividend fund like VNQ/VIHAX to get some dividend as well as international growth.

Does this make sense? Am I only dreaming of FIRE?
thanks
kv


Eucalyptus

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Re: Am I FIRE'able
« Reply #1 on: October 04, 2017, 07:44:42 PM »
Fire now!

using the 4% rule, and your 3.3m, you would comfortably be able to afford an income of $132k.

If I was you I'd keep it simple and have two to four vanguard index funds for much of it (I'm Australian so can't help you on 401ks, IRA etc). I'm guessing you are probably smart enough to handle a more complicated portfolio of index funds, but its probably not worth the bother.

I would probably sell of most of the MS exposure and invest it into the index funds.

I wouldn't stress too much about funds that are designed to generate more dividends. Focus on the total % growth. When you get dividends, you spend them first, then if you need more cash, you can sell off individual stocks. It doesn't really matter in the end.

Portfolio Charts has a ton of information about different portfolio types, worth spending time going through that website. Read the bogleheads wiki also.

Best of luck, and, enjoy retirement! :-)

keyvaluepair

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Re: Am I FIRE'able
« Reply #2 on: October 04, 2017, 08:17:28 PM »
Thanks much Eucalyptus and I'll refrain from the Foster's and swagman jokes.

(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?
(2) I will certainly check out the links you pointed out, so your advice is to avoid dividend funds and go purely for growth funds with minimal management loads. Is that right?
kv


Telecaster

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Re: Am I FIRE'able
« Reply #3 on: October 04, 2017, 08:46:28 PM »
Thanks much Eucalyptus and I'll refrain from the Foster's and swagman jokes.

(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?
(2) I will certainly check out the links you pointed out, so your advice is to avoid dividend funds and go purely for growth funds with minimal management loads. Is that right?
kv

1) I'm not a fan of hedging strategies because you are betting against yourself.  The easiest, most cost effective hedge is simply sell some of your position, right?  There is nothing "wrong" with having a large position in one stock.  If MSFT is a great stock, then it is a great stock.  But diversification is cheap and easy to do.  If you are thinking of hedging, then it is probably cheaper to diversity into a broad, low cost index fund.

2) Dividends are an illusion. All they are is an automatic, taxable, diversification from your position.

MDM

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Re: Am I FIRE'able
« Reply #4 on: October 04, 2017, 10:00:03 PM »
(4) We have a rather large position in Microsoft, about $800K worth - you can guess where I worked.
You might find Tax Strategy for Timing of Early Retirement with Significant Long-Term Capital Gains - Bogleheads.org of interest.

mjr

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Re: Am I FIRE'able
« Reply #5 on: October 05, 2017, 12:51:42 AM »
I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?

Your login name identified you as a software person long before you mentioned M$ :-)

Regarding "crazy political climate", I read today yet another article about how the Australian stock market is small, non-diversified and going nowhere fast and we need to be investing globally.  Europe is a basket case in my opinion.  Guess what, that leaves the US. There's no perfect place to  put your money.  Stick a fraction in VTI and the rest in a global index fund.

As for whether or not you're ready to FIRE, you already knew you reached that point a long time ago.

I'm also bemused at how many yanks comment here about their political climate, but that's another thread.
« Last Edit: October 05, 2017, 01:01:40 AM by mjr »

keyvaluepair

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Re: Am I FIRE'able
« Reply #6 on: October 05, 2017, 08:37:51 AM »
Thanks so much for the advice, Mustachians. You rock.

I am actually considering a second career at this point, am thinking of becoming a home electrician.

DrF

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Re: Am I FIRE'able
« Reply #7 on: October 05, 2017, 09:00:51 AM »
You worked too long. You could have pulled the plug years ago.

IMHO:
1) don't contribute any more to the 529. That's a huge amount already, and will likely more than double by the time your youngster goes to college. There's probably too much in there as is.

2) don't worry about MSFT stock. It's a great company and not going anywhere anytime soon. Do you have dividends reinvested on it? If so, cancel that and put all dividends into a broad market ETF. In FIRE, I would probably try to sell out of MSFT before you sell anything else.

3) Are you set on staying in the PNW? That's a lot of equity not really doing anything for you. You could sell and move to many wonderful locations at a third the price of your current house.

4) What's your bond exposure look like? You have a substantial net worth that would likely survive even a severe market correction, but near FIRE you may want to have between 20-40% broad bond.

5) Push social security as far back as possible (70 I think). You'll get the most benefit and you really don't need it before then.


dandarc

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Re: Am I FIRE'able
« Reply #8 on: October 05, 2017, 09:06:13 AM »
You have $3.3 million plus a paid off house?

Yeah - quit yesterday.  The second career - just make sure you're doing it because you enjoy it / get something very valuable other than money out of it more than anything.  You don't need the money.

acroy

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Re: Am I FIRE'able
« Reply #9 on: October 05, 2017, 09:17:14 AM »
Congratulations
Badass! you are set.
I would sell out the MS stock, rebalance. It's a good company but that's a big % of your portfolio.
Good luck!!

Cycling Stache

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Re: Am I FIRE'able
« Reply #10 on: October 05, 2017, 09:33:45 AM »
(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?

Ah, the effects of anchoring.  You're asking the wrong question.

If you were investing $3.3 million today, would you put $800k in Microsoft?

If not, time to diversify.  It's that simple.  Every single day you make a decision or non-decision to invest your money however you're going to invest it.  So, imagine pulling out all $3.3 million today, and ask how you would invest it tomorrow.   Then do that.

Also, you're set financially, but it's always easier to see in other people than yourself.  It's a recurring issue on this board. 

Congrats, and good luck!

BTDretire

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Re: Am I FIRE'able
« Reply #11 on: October 05, 2017, 09:45:08 AM »
Thanks much Eucalyptus and I'll refrain from the Foster's and swagman jokes.

(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?
(2) I will certainly check out the links you pointed out, so your advice is to avoid dividend funds and go purely for growth funds with minimal management loads. Is that right?
kv

1) I'm not a fan of hedging strategies because you are betting against yourself.  The easiest, most cost effective hedge is simply sell some of your position, right?  There is nothing "wrong" with having a large position in one stock.  If MSFT is a great stock, then it is a great stock.  But diversification is cheap and easy to do.  If you are thinking of hedging, then it is probably cheaper to diversity into a broad, low cost index fund.

On the other hand about hedging if you sell and pay 28% or 35% in taxes that is money thrown away, I suggest you could probably do a lot of hedging for much less than that.
 Ask in the investing thread, there are some over there that now about it.

keyvaluepair

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Re: Am I FIRE'able
« Reply #12 on: October 05, 2017, 01:39:51 PM »
Again, I have to reiterate how much I appreciate the feedback here.

(1) Almost all of the MS stock is under LTCG.  Are there good tax (avoidance) strategies here?
(2) We love the PNW. The place I'd strongly consider moving to is Eugene, OR - the mountains are close and the cost of living is about half of what it is here with good schools. But have to sell the wife on that one :-). Also good assisted death alternatives in OR.
(3) WRT to the statement of not seeing the FIRE in you: Being an immigrant to the good old USA, I guess I have a perhaps irrational fear of not having any safety net. Immigrants are always scared shitless that something is going to happen to them and their wife and children will be left destitute ;-).
(4) Will check out the hedging thread since I can't immediately drain the position.

ysette9

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Re: Am I FIRE'able
« Reply #13 on: October 05, 2017, 03:25:16 PM »
If you have a paid-off house in an area you love and more than enough investment income to keep you afloat forever, why on earth would you move? Quit work tomorrow and go have a great time raising your kid. Congrats on winning the game!

YoungInvestor

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Re: Am I FIRE'able
« Reply #14 on: October 05, 2017, 03:41:43 PM »
(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?

Ah, the effects of anchoring.  You're asking the wrong question.

If you were investing $3.3 million today, would you put $800k in Microsoft?

If not, time to diversify.  It's that simple.  Every single day you make a decision or non-decision to invest your money however you're going to invest it.  So, imagine pulling out all $3.3 million today, and ask how you would invest it tomorrow.   Then do that.

Also, you're set financially, but it's always easier to see in other people than yourself.  It's a recurring issue on this board. 

Congrats, and good luck!

The underlying assumption of this post is that there is not a signification adjoint off capital gains in that msft stock.

If there is, the question is whether you would prefer 800k in msft or a fair bit less in an index fund.

robartsd

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Re: Am I FIRE'able
« Reply #15 on: October 05, 2017, 03:43:52 PM »
Ignoring your MS stock completely you have enough investable assets that 80k/year is about a 3.2% withdraw rate. While you might seek advice on investment strategies and tax planning, you are certainly have enough for FIRE.

5) Push social security as far back as possible (70 I think). You'll get the most benefit and you really don't need it before then.

If you have a paid-off house in an area you love and more than enough investment income to keep you afloat forever, why on earth would you move? Quit work tomorrow and go have a great time raising your kid.
Live whereever you want.

triangle

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Re: Am I FIRE'able
« Reply #16 on: October 05, 2017, 03:46:22 PM »
Regarding the MSFT shares, I would be inclined to slowly sell off a few shares every quarter/year.  Maybe 200 or so every quarter as long as you believe the companies future prospects are good, slowly draining from the pool to avoid generating extra high income in any given year.  Or rather than a some exact number per year, I would look at your individual lots to determine how much capital gain income you can absorb in coming years without going into the higher/highest tax brackets.

While a very high capital gain is great overall, unless you think MSFT is a bad investment I would not be rushing for the exit and paying taxes on it all in year 1. And I would be keeping a very close eye on the progress of any tax law changes being proposed in congress, especially around corporate rates and the reduced rates on repatriation. You must be aware of how much cash MS is potentially able to bring back which could fuel an even higher share price. Number 1 on the list is MSFT: http://www.zerohedge.com/news/2017-10-04/these-us-companies-have-most-cash-parked-overseas

Tyson

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Re: Am I FIRE'able
« Reply #17 on: October 05, 2017, 04:03:20 PM »
Paid off house?  $3.3 mil in the bank/savings/investments?  $300k in the 457?  Dude, you aren't FI, you're stinking rich!  Enjoy it :-) 

Mr. Boh

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Re: Am I FIRE'able
« Reply #18 on: October 05, 2017, 04:20:33 PM »
I agree with triangle about selling off your MSFT position gradually. Work with your tax professional to find out how much long term capital gains you can comfortably absorb yearly and start by selling the stock with the highest cost basis. Use the proceeds to diversify. You haven't mentioned your asset allocation but if I were you I would make sure I had at least a portion of my portfolio in foreign stocks, bonds and REITs. VXUS, BND and VNQ all have healthy dividends. FWIW you only need a dividend of less than 2.5% on the 3.3 million to generate your desired $80,000 income. Why not use those index funds to diversify while generating the income you desire.

Financial.Velociraptor

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Re: Am I FIRE'able
« Reply #19 on: October 05, 2017, 05:19:39 PM »
You are easily FIRE. 

I'd look into selling covered calls on a portion of your MSFT to exit gracefully and generate some income to cover your LTCG.

DavidAnnArbor

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Re: Am I FIRE'able
« Reply #20 on: October 05, 2017, 09:46:17 PM »
Don't make any decisions yet. Think about things, consult maybe with a CPA tax professional, also ask on Bogleheads,  or just keep reading more information.

If you were to sell $800,000 of Microsoft stock all at once, you probably would have a very large income, and it would create all kinds of tax implications such as the Alternative Minimum Tax, and cause you to pay an additional capital gain surcharge tax, etc.  Hence, selling any of that Microsoft should be done gradually over time.

Don't take social security at age 67, wait til age 70 and get the higher amount - if you think you'll live beyond the age of 82.

There's no advantage to owning stocks for the sake of dividends. There's no advantage of having qualified dividends over having capital gains.
Therefore, stick with a broad US and International Stock Index Fund.  Add a Total Bond market index for further diversification and asset protection. This is easier to do than your job at Microsoft was.

Make sure you have your legal affairs in order, a power of attorney, living will, living revocable trust, etc. Maybe you want to get long-term care insurance though it's debatable as to whether that's any good anymore.

keyvaluepair

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Re: Am I FIRE'able
« Reply #21 on: October 06, 2017, 09:11:16 AM »
(1) Great point on asset repatriation regarding MS stock and the tax implications of the same.
(2) Most of the investment allocations are in low cost Vanguard index funds along with one fund for international growth.
(3) Relocation: I am not thinking of relocating for at least a couple of years since other friends of mine have been pestering me to consult and build what are called DevOps apps for local companies moving to Azure. So if that flies, it might be a decent money source so that I can squirrel away even more. Ultimately though, I don't think that I want to work (as in really work) for longer than 60. Eugene seems like a nice place to live, I have friends there who love it, and I can get a comparable house for $500K and still have a gain of $500K given the housing craziness here.

Cycling Stache

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Re: Am I FIRE'able
« Reply #22 on: October 06, 2017, 09:16:38 AM »
(1) So here is the deal with the MS stock, it has shown considerable appreciation and based on my knowledge, I see more upside in the next 2 years. But I am concerned enough that I'd like to insulate myself from downside risk given the somewhat crazy political climate in the US. Do the aficionados on this list use married puts or other hedging strategies?

Ah, the effects of anchoring.  You're asking the wrong question.

If you were investing $3.3 million today, would you put $800k in Microsoft?

If not, time to diversify.  It's that simple.  Every single day you make a decision or non-decision to invest your money however you're going to invest it.  So, imagine pulling out all $3.3 million today, and ask how you would invest it tomorrow.   Then do that.

Also, you're set financially, but it's always easier to see in other people than yourself.  It's a recurring issue on this board. 

Congrats, and good luck!

The underlying assumption of this post is that there is not a signification adjoint off capital gains in that msft stock.

If there is, the question is whether you would prefer 800k in msft or a fair bit less in an index fund.

I'm not sure this reasoning is correct, unless the taxes are onerous.

First, is the MSFT stock held in a retirement account or taxable?

Even if taxable, LTCG rates are 20% at the top end, correct?  That's close to what you're going to pay at some point regardless (although admittedly paying now rather than later).

If you had $800k to invest and were planning to put it all in VTSAX or something equivalent, would you instead put it all in e.g. Target stock if I told you there would be a 5% lower tax on gains?  Who here would take that risk?

The same goes with the idea to watch the potential tax changes that might affect MSFT (later post).  Haven't those expectations or that uncertainty been built into the stock price?  Does OP or anyone else here have better information about what's going to happen with the proposed tax changes than the market?  Does anyone here recommend loading up a significant amount of any investor's portfolio in one stock?

If the taxes will be significantly higher than they might otherwise (e.g., ordinary income tax rates, and someone else mentioned AMT--which I'm not sure about so definitely worth looking into), then holding or slowly unwinding the position might make sense.  Or if you're thinking you'll never sell them and instead leave them as inheritance or give as charity, so no gains taxes.

But for a possible 5% tax rate difference?  No way I'd recommend that someone put 30% of their investments in one company's stock to save 5% on any potential tax on the gains.  Don't let the fact that you already own the stock irrationally change the analysis, which is a common behavioral economics error.

So check with a tax professional.  But if these are retirement accounts (no tax issues), or you're paying long-term capital gains rates of 20% or less, I'd liquidate that position immediately and invest it according to your overall investment plan (total market, or whatever that might be).  Although I guess the counterpoint is that you have so much money that it probably won't matter any way!

Cycling Stache

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Re: Am I FIRE'able
« Reply #23 on: October 06, 2017, 09:22:55 AM »
One more point just to isolate the tax issues from everything else regarding selling MSFT.

If we were to start a new thread that said a person with a $1 million to invest was thinking of putting 30% in MSFT and asked for advice, what do you think the answers would be.

I bet it would be 100% no, that's a terrible idea, etc.

Again, MSFT may be a great company with great potential.  But if you believe that you do not know more than the market, then it would never be worth taking that risk. 

If correct, then the tax issues are the only issues, and you have to decide what additional risk that you are willing to bear (that you would otherwise not) in order to save taxes on gains.

robartsd

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Re: Am I FIRE'able
« Reply #24 on: October 06, 2017, 01:42:56 PM »
If correct, then the tax issues are the only issues, and you have to decide what additional risk that you are willing to bear (that you would otherwise not) in order to save taxes on gains.
Since the the MSFT shares could go to zero and the OP would still be FI, the risk isn't that important. I'm in the plan tax strategy camp. (Not that it matters, but his MSFT position is 24.24% of portfolio, not 30%).

alexpkeaton

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Re: Am I FIRE'able
« Reply #25 on: October 06, 2017, 02:18:06 PM »
Sell the MSFT and buy AAPL! ;)

Ok, sorry, bad joke. :)

+1 to the slowly liquidate it vote. As others have mentioned, I'd probably just live off the proceeds while leaving your more diversified investments intact. Another +1 to stopping automatic dividend reinvestment if you're currently doing that.

However, if you'd like to leave the shares to your kid, you could just keep it and your kid would get a step-up in basis upon your death. I think this is why a previous poster suggested selling the highest basis shares first, both to minimize your current taxes and maximize the value of your estate. (Of course, if MSFT goes to $0, well...)

Pylortes

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Re: Am I FIRE'able
« Reply #26 on: October 06, 2017, 03:42:38 PM »
Let's be real. MSFT has no chance of going to $0.  There is no risk of that- it's a blue chip company with a long history.  They have billions sitting overseas with nothing to do!  Selling if off slowly to diversify a bit and avoid any huge tax bite is the way to go (assuming you do not feel comfortable with 24% or whatever net worth in the stock).  And funnel dividends into something else such as low cost index funds.    OP could create an additional semi dividend stream by selling like 3-4% shares a year and use some for living expenses, and move any excess to index funds.

keyvaluepair

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Re: Am I FIRE'able
« Reply #27 on: October 06, 2017, 08:23:49 PM »
(1) Yeah, I think that the plan is a gradual draw down to a more reasonable position. Obviously, I can't comment on what I might know about MSFT even though I no longer work there any more (<happiness>). Already doing covered calls today, just to sweeten the deal. Most of my MSFT tranches are LTCG.
(2) Absolutely no f'ing way the kid gets a gigantic pot of $ without doing anything to earn it.
(3) Absolutely doing the 401k -> IRA -> Roth rollover this year.



lhamo

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Re: Am I FIRE'able
« Reply #28 on: October 06, 2017, 09:24:30 PM »
I second the recommendations to start selling off the MSFT and diversify -- you could do so slowly selling off about 50k/year and just having a portion of the rest of your stash invested in things that throw off enough dividends to keep you below taxable thresholds.   As long as the ACA is alive you will also qualify for subsidies on a Silver or Bronze plan if you keep your income low enough, which will also help keep your expenses down.   I just checked the exchange the other day and my preferred Silver plan is only around $500/month for a family of four with subsidy as long as I keep our taxable income under 50k.

Eugene is a nice town but you don't need to move to OR to pursue assisted suicide if you have a terminal condition -- WA legalized it in 2009:

https://www.medicalnewstoday.com/articles/141318.php

MrSpendy

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Re: Am I FIRE'able
« Reply #29 on: October 06, 2017, 10:01:30 PM »
not sure if giving to charity is a goal of yours but you may wish to consider donating some of your appreciated shares of MSFT to a Donor Advised Fund when it's advantageous to do so and then distributing over time.

https://www.schwabcharitable.org/public/file/P-5260825
https://www.fidelitycharitable.org/giving-account/what-you-can-donate/donating-stock-to-charity.shtml
https://www.kitces.com/blog/rules-strategies-and-tactics-when-using-donor-advised-funds-for-charitable-giving/

Once you quit, you could roll everything into a traditional IRA, then take advantage of your 16 years before RMD's to slowly convert to a Roth, and simultaneously (if you want to donate to charity), donate your appreciated MSFT to offset up to 30% of your AGI created from the slow roth conversions. converting to a roth would mitigate those pesky RMD's that will probably lead to lots of tax once they and SS kick in at 70.

At your level of wealth and what i assume is a big chunk of money in traditional tax advantaged accounts, optimizing tax and stuff like that is probably your best bang for your buck.

could you provide a breakdown of how the $3.3mm is distributed across what types of accounts and the tax basis for taxable holdings?

When thinking about hedging your MSFT, the key is to avoid "constructive sale" at all cost. this could have big tax implications! Best to talk to a CPA familiar in the matter.

You will have a dramatically overfunded 529. Probably should talk to a CPA or some kind of tax planner about that too.

EDIT:
here's some more links. I think your combination of highly appreciated assets, plenty in traditional tax advantaged and high assets relative to desired spending, makes you a good candidate for this strategy if you want to donate to charity and maximize the value of your after tax estate.
https://www.aefonline.org/blog/roth-ira-tax-free-conversions-through-donor-advised-fund
https://www.fidelity.com/viewpoints/retirement/tax-savvy-roth-conversions

« Last Edit: October 07, 2017, 04:22:18 PM by mrspendy »

Roland of Gilead

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Re: Am I FIRE'able
« Reply #30 on: October 06, 2017, 10:07:24 PM »
You are lucky to be over 50 and leaving Microsoft.  All of your grants and gold awards will vest immediately.  It sucks when you leave at 47...leave so much on the table.

dandarc

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Re: Am I FIRE'able
« Reply #31 on: October 09, 2017, 08:45:18 AM »
not sure if giving to charity is a goal of yours but you may wish to consider donating some of your appreciated shares of MSFT to a Donor Advised Fund when it's advantageous to do so and then distributing over time.
+1 - this is a fantastic suggestion.  Get the shares off your books with no capital gains concerns whatsoever.

Exflyboy

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Re: Am I FIRE'able
« Reply #32 on: October 09, 2017, 10:23:22 PM »
Fellow immigrant here also in the PNW.. I TOTALLY get the fear thing!

WE only spend about $30k ish and have $2.4M  (if we count the value of my UK pension in addition to our stash) plus we have a paid off house about half the value of yours.

We do get a little over $20k/year in rental income

We could EASILY spend 3 times what we do now and be perfectly fine.. But it took me a long time to convince myself of that fact.

Put it this way.. Stress kills! Your dreaming of quitting. You only have limited time and chances are your going to die with a huge pot o money! Quit now and your might have longer to spend it.. Which you won't..:)

I suspect wiring houses sounds like fun and having wired a few myself in my spare time I can say it is fun.. for the first house anyway..

I have been fully Fired for almost 18 months and have spent precisely $zero from the stash so far.. been living off the rent!

DavidAnnArbor

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Re: Am I FIRE'able
« Reply #33 on: October 10, 2017, 04:43:58 PM »

Put it this way.. Stress kills! Your dreaming of quitting. You only have limited time and chances are your going to die with a huge pot o money! Quit now and your might have longer to spend it..

Yes I agree it's important at this point to have better quality of life than working at a 9-5 type job for a boss can provide

keyvaluepair

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Re: Am I FIRE'able
« Reply #34 on: October 12, 2017, 07:02:45 AM »
Yes, I agree with everyone on this list. Thanks so much, guys.

MrThatsDifferent

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Re: Am I FIRE'able
« Reply #35 on: October 12, 2017, 07:49:18 AM »
Yes, I agree with everyone on this list. Thanks so much, guys.

You knew you were Fireable when you posted, you just wanted everyone to know you were rich as fuck. We get it, not too many places to brag. ;-)~

DavidAnnArbor

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Re: Am I FIRE'able
« Reply #36 on: October 12, 2017, 08:03:46 AM »
If he posted on bogleheads he would actually be poor.

keyvaluepair

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Re: Am I FIRE'able
« Reply #37 on: October 12, 2017, 09:40:16 AM »
No, honestly, I was not bragging. I'm just not that kind of guy. If you saw some of my t-shirts, you'd know. It really is the immigrant fear factor combined with worries about medical expenses down the pike.

Exflyboy

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Re: Am I FIRE'able
« Reply #38 on: October 12, 2017, 02:47:38 PM »
No, honestly, I was not bragging. I'm just not that kind of guy. If you saw some of my t-shirts, you'd know. It really is the immigrant fear factor combined with worries about medical expenses down the pike.

I knew where you were coming from.. When I posted about the fear of running out of money and "do we really have enough".. Well I got laughed at.

It takes a while to realise you ARE FI.. When I had $1.3m I honestly had no idea I was.. So I quite (in 2014) and now have twice as much!

I guess "THEY" were right..:)

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Re: Am I FIRE'able
« Reply #39 on: October 13, 2017, 07:52:39 AM »
I work for a large utility company that pays a nice dividend. I totally understand the psychology behind thinking there's a very specific and special reason to hold that company's stock disproportionately. (in the case of my employer, it's having a very low beta). I should note that my current stake in company stock is only about $25,000, but, yes, there were recent pay checks in which 100% of my contributions were made into the company stock.

Listening to some Paul Merriman podcasts has helped me see that I'm probably wrong, that no individual stock can offer a return that adequately compensates for the risk. Set the dividends to pay as cash (not re-invest) today! This should be relatively painless. You'll need to account for tax consequences as you unwind the position, but 25% of your total sounds extreme.


Eucalyptus

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Re: Am I FIRE'able
« Reply #40 on: October 13, 2017, 06:07:21 PM »
Thanks much Eucalyptus and I'll refrain from the Foster's and swagman jokes.


Can't say I've ever really been hit with a Fosters or swagman joke... fire them at me!

MrThatsDifferent

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Re: Am I FIRE'able
« Reply #41 on: October 13, 2017, 06:58:57 PM »
Americans think Australians actually drink Fosters. They have no idea an Aussie would rather die first.

triangle

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Re: Am I FIRE'able
« Reply #42 on: October 14, 2017, 12:36:28 AM »
Americans think Australians actually drink Fosters. They have no idea an Aussie would rather die first.
Just like the English (UK) think that Americans love Budweiser. :-) Of course a some people do but it is more about heavy advertising that drives perceptions and sales volume. Personally I think most Pilsner beers taste nearly the same but I am no connoisseur.

As far as owning too much of your own company's stock, I would be much more comfortable holding an oversized position in a blue chip company like MSFT or a utility company (regulated monopoly) as compared to small company. But the ironclad rule of thumb is never hold too much of your current employer's stock since the financial risk is multiplied as so many Enron employees found out (as well as some Y2K tech companies), where people lost their jobs as well as their retirement savings. 

waltworks

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Re: Am I FIRE'able
« Reply #43 on: October 14, 2017, 10:04:05 AM »
I would do exactly zero with your existing holdings. Forget about them. You're plenty diversified. No reason to spend any mental energy on it.

Really, the issue is what you want to do with your life from here out. It sounds like you *sort of* like working and might want to work more? But maybe not? You might want to live somewhere else, but maybe not?

Money is not your problem anymore. You have ~20-30 years of functional life left, probably. What do you want to do with that time?

-W

LadyMaWhiskers

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Re: Am I FIRE'able
« Reply #44 on: October 14, 2017, 10:23:00 AM »
In your shoes I would hold the MSFT and plan to will it your 7 year old. She'll get the step up in basis to avoid capital gains. I didn't read all the replies to see if this was addressed, but I'm assuming there's a pile of tax liability packed into those shares. You've got plenty of money to retire/live on. If you want to play around and get fancy, have fun, but from a financial standpoint, you have a great cushion and could just ignore MSFT shares.

If somehow your basis is already large, then disregard the above.

keyvaluepair

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Re: Am I FIRE'able
« Reply #45 on: October 14, 2017, 04:39:32 PM »
I have to say for the Aussies on this list, I actually don't have any good Fosters jokes. Fosters is the PBR of Australia, after all. The one beer to have if you're having more than six. However, I do manage to irritate the Aussies on other cricket teams by bringing it along for matches - though I replace it by real beer at the end. Swagman jokes are far between - other than the indirect reference to one in the canonical Blonde joke.

I am actually gradually unwinding the MS position since I left MS already and am moving it mostly to VTSAX and FSIVX. I hope not to leave much to my 7 year old. I'm way afraid of raising a brat. The only reason that I'm staying in Washington - with a large tax payment on the house is because my wife doesn't want to move - yet.

Just 20 years of life? Depressing. But given what the Orange Monster is doing to our insurance system, it might be shorter.....

In terms of what I want to do when I grow up - that is a pretty hard question. I've spent my life typing and I realize that I'm tired of it. I don't wanna type any more.

Exflyboy

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Re: Am I FIRE'able
« Reply #46 on: October 14, 2017, 04:55:28 PM »
Oh as to company stock I used to work a fortune 500 company.. So famous that the founders actually STARTED silicon Valley in a garage across the street from Stamford University!

I used to hold all my $401k money in company stock and rolled in and out and made 36% in the one year I did that. (like it was up to $125k).

I decided I couldn't keep doing that and rolled into index funds...

The Stock back then was pushing $80.. Its now worth about $30.

OK not an Enron but even so, I am SOO GLAD I stopped playing that game..:)

triangle

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Re: Am I FIRE'able
« Reply #47 on: October 15, 2017, 12:08:14 AM »
I have to say for the Aussies on this list, I actually don't have any good Fosters jokes. Fosters is the PBR of Australia, after all. The one beer to have if you're having more than six. However, I do manage to irritate the Aussies on other cricket teams by bringing it along for matches - though I replace it by real beer at the end. Swagman jokes are far between - other than the indirect reference to one in the canonical Blonde joke.

I am actually gradually unwinding the MS position since I left MS already and am moving it mostly to VTSAX and FSIVX. I hope not to leave much to my 7 year old. I'm way afraid of raising a brat. The only reason that I'm staying in Washington - with a large tax payment on the house is because my wife doesn't want to move - yet.

Just 20 years of life? Depressing. But given what the Orange Monster is doing to our insurance system, it might be shorter.....

In terms of what I want to do when I grow up - that is a pretty hard question. I've spent my life typing and I realize that I'm tired of it. I don't wanna type any more.
LOL, So many partisan debates about Trump vs Obama/Gruber approach to healthcare. IMO neither approach is correct, but I also think that if Congress had mandated in the late 90's that every citizen was entitled to a PC and internet and controlled all the costs we might all still be using Win98 and AOL dial-up. Also (insurance != health).

I took the OP comments to say that you had 20-30 years as productive professional life ahead of you if you chose that path. That at some point afterwards you would want to sit back and take it easy.

waltworks

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Re: Am I FIRE'able
« Reply #48 on: October 15, 2017, 09:25:01 AM »
To clarify: OP is 52. A quick look at an actuarial table says their life expectancy is about 28 years (assuming OP is male). There will most likely be some period of disability prior to death (most deaths at this age are not sudden/accidental).

Obviously, OP could live longer or die sooner. That number is just an average. But it should put into perspective the stakes - OP's life is 2/3 over. If he doesn't enjoy work, and has several million dollars... it's time to think hard about what is important in life.

-W

TomTX

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Re: Am I FIRE'able
« Reply #49 on: October 15, 2017, 11:58:56 AM »
I work for a large utility company that pays a nice dividend. I totally understand the psychology behind thinking there's a very specific and special reason to hold that company's stock disproportionately. (in the case of my employer, it's having a very low beta). I should note that my current stake in company stock is only about $25,000, but, yes, there were recent pay checks in which 100% of my contributions were made into the company stock.

Listening to some Paul Merriman podcasts has helped me see that I'm probably wrong, that no individual stock can offer a return that adequately compensates for the risk. Set the dividends to pay as cash (not re-invest) today! This should be relatively painless. You'll need to account for tax consequences as you unwind the position, but 25% of your total sounds extreme.

Investing in your employer's stock is doubly risky. If they go under (for whatever reason - both Enron and Arthur Anderson were thought to be bulletproof) - you lose your job AND your stash.